1. The Grays son, Joel, graduated and received his bachelors degree in June 2018. In 2018, Joel turned age 24 and provided more than half of his support. The Grays file jointly with a modified AGI of $116,000. Joel has modified AGI of $26,000. Who can claim a tax credit for education expenses paid by Joel during 2018?

a) Only the Grays can claim the Lifetime Learning Credit or the American Opportunity Credit (if Joel qualifies), whichever is more beneficial.

b) Only Joel can claim the Lifetime Learning Credit or the American Opportunity Credit (if he qualifies), whichever is more beneficial.

c) Either the Grays or Joel (but not both) can claim an education tax credit.

d) Neither the Grays nor Joel can claim an education tax credit.

2. Linda paid her tuition and later received a Pell grant (tax-free educational assistance) covering part of the tuition. All of the following are true except:

a) The Pell grant should reduce the amount of qualified expenses for the education credit.

b) If the Pell grant was received after Linda claimed the education credit on her return, she may have to repay all or part of the credit.

c) If Linda claimed an education credit and received a reimbursement for that same year; Linda must refigure the credit for a previous year and report the difference as an additional tax on line 11(Form 1040).

d) Linda does not need to adjust her education credit by the Pell grant since it was received after she filed her return.

3. Judys expenses for her third year at a university include the following: $3,000 for tuition, $500 for books, $2,500 for her dormitory room, and $2,200 for food. What amount of the expenses will qualify for the American Opportunity Credit?

a) $6,000

b) $3,000

c) $8,200

d) $3,500

4. Chris divorced Ken in November 2018. Which of the following items may be considered alimony for Ken?

a) Monthly cash payments

b) Child support.

c) Chris allowing Ken to use tools to maintain property.

d) The car Ken receives as part of the divorce settlement.

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